Role of Media

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Transcript Role of Media

Challenges in Implementation of
Competition Law in Bangladesh:
Role of Media
Dr. Tureen Afroz, Barrister-at-Law
Associate Professor, School of Law, BRAC University
Advocate, Supreme Court of Bangladesh
Ph.D. & LL.M., Australia; LL.B. (Hons.), UK
B.A. (Hons.) (Eco. & Pol. Sc.) & MA (Eco), Delhi School of Economics, India
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OVERVIEW OF COMPETITION
REGULATION
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WHY REGULATION?
•Externalities (private cost < social cost)
•Public goods (free rider problem)
•Information asymmetry (lemons market)
•Market failure (systemic risk)
•Equitable justice (production & distribution)
•Consumer welfare (growth vs. development,
poverty etc.)
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REGULATING COMPETITION
•Competition Policy
•Competition Law
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COMPETITION POLICY
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DEFINITION OF COMPETITION POLICY
• Competition Policy refers to a set of government
measures that enhance competition or competitive
outcomes in the markets.
•It includes both economic policies that enhance
competition and competition laws.
Competition Policy = f (ecoc policy, compn law)
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RELEVANT ECONOMIC POLICIES
•International trade policy
•Industrial policy
•Privatization reform policy
•Labor policy
•Exchange rate policy
•Fiscal policy
•Monetary policy
•Regulatory reform policy
•Intellectual property rights policy
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COMPETITION LAW
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COMPETITION LAW
The most ancient example of competition law is the Lex
Julia de Annona of Rome in around 50BC. But in today’s
world we have• United States:
the Sherman Act, 1890
• United Kingdom: the Monopolies and Restrictive Practices
(Inquiry and Control) Act, 1948
• European Union: the Treaty of Rome, 1957
• Germany:
the Act Against Unfair Restraints of
Competition, 1957
• Japan:
the Act Concerning Prohibition of Private
Monopoly and Maintenance of Fair Trade,
1947
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COMPETITION LAW CONTD.
•Since the beginning of the 1990s, the number of
systems of competition law has proliferated.
•Competition law is now in place in all six
continents, and in all kinds of economies—large,
small, continental, island, advanced, developing,
industrial, trading, agricultural, liberal and postcommunist.
•More than half of WTO members have adopted a
competition law.
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IN BANGLADESH
•In the absence of an established and effective
competition legislation, restrictive trade practices
have prevailed in the markets and eroded
consumer interests & rights.
•There are no evidences documenting the anticompetitive behavior of business companies
operating in Bangladesh.
•The most common anti-competitive actions are
shown in the diagram11
IN BANGLADESH (Cont…)
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LEGISLATIVE HISTORY OF
COMPETITION LEGISLATION
• Monopolies and Restrictive Trade Practice
(Control and Prevention) Ordinance, 1970 is
valid but never got implemented.
• Recently Bangladesh has enacted the
Competition Act, 2012:
–To encourage, ensure and maintain
competitive environment in business; and
–To prohibit, control and eradicate anticompetitive practices.
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CONTENTS OF THE ACT
The Act contains 7 chapters and 46 sectionsChapter I:
Preliminary
Chapter II:
Establishing Bangladesh Competition
Commission, etc.
Chapter III:
Anti-Competitive Agreements, abuse
of dominant position, etc.
Chapter IV:
Complaints, Investigation, Orders, etc.
Chapter V:
Review, Penalties, Appeal, etc.
Chapter VI:
Financial Matters of the Commission
Chapter VII: Miscellaneous
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PROHIBITED/REGULATED
ANTI-COMPETITIVE
PRACTICES
•Anti-competitive agreements (section 15)
•Abuse of dominant position (section 16)
• Anti-competitive Combination (section 21)
(acquisitions and mergers)
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ANTI-COMPETITIVE AGREEMENTS
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PROHIBITION ON ANTICOMPETITIVE AGREEMENTS
Section 15 of the Act:
‘No person shall enter into any agreement,
directly or indirectly, in respect of production,
supply, distribution, storage, acquisition or
control of goods or provision of services, which
causes or is likely to cause an adverse effect on
Competition or creates monopoly or oligopoly in
the market.’
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ANTI-COMPETITIVE AGREEMENTS
1.
Horizontal agreements
(a) Price fixing agreements [section 15(2)(a)(i)]
(b) Bid-rigging agreements [section 15(2)(a)(ii)]
(c) Market allocating agreements [section 15(2)(b) & (c)]
(d) Output restricting agreements [section 15(2)(b) & (c)]
(e) Joint boycott
2.
Vertical agreements
(a) Tie-in sale agreement [section 15(3)(a)]
(b) Exclusive supply agreement [section 15(3)(b)]
(c) Exclusive distribution agreement [section 15(3)(c)]
(d)Refusal to deal [section 15(3)(d)]
(e) Resale price maintenance [section 15(3)(e)]
(f) Quantity forcing
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WHEN ANTI-COMPETITIVE
AGREEMENTS ARE TOLERATED?
•
To protect intellectual property right [section
15(4)(a)]
•
To protect the right of any person to export
goods [section 15(4)(b)]
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ABUSE OF DOMINANCE
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DOMINANCE
•
Dominance means having ‘substantial market
power’.
•
When one firm acts as a price setter and faces
smaller price-taking firms, it is called a
‘dominant firm’ which typically has a large
market share.
•
The smaller price-taking firms are called
‘fringe firms’.
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PROHIBITION ON ABUSE OF
DOMINANCE
Section 16 of the Act :
No corporation or business entity shall
abuse its dominant position.
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WHAT IS ABUSE OF DOMINANT
POSITION?
Section 16(2) of the Act:
there shall be an abuse of dominant position, if an
enterprise(a) directly or indirectly, imposes unfair or
discriminatory condition in purchase or sale of
goods or service, or price in purchase or sale
(including predatory price) of goods or service,
(b) limits or restricts - i. production of goods or
provision of services or market therefore, or ii.
technical or scientific development relating to
goods or services to the prejudice of consumers, 23
Contd…
(c) indulge in practice or practices resulting in
denial of market access, or
(d) makes conclusion of contracts subject to
acceptance by other parties of supplementary
obligations which, by their nature or according
to commercial usage, have no connection with
the subject of such contracts,
(e) uses its dominant position in one relevant
market to enter into, or protect, other relevant
market.
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TYPES OF ABUSE OF DOMINANCE
Exploitative practices
⁻ IPR and Excessive pricing
⁻ Price Discrimination
⁻ Tie-ins
Exclusionary practices
⁻ Refusal to deal
⁻ Predatory pricing
⁻ Non-price predation
⁻ Exclusive dealing
⁻ Boycott
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ANTI-COMPETITIVE
COMBINATIONS
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COMBINATIONS
Sec 21 of the Act:
•
Anti-competitive combinations are prohibited.
•
Other combinations require approval of the
Bangladesh Competition Commission.
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TYPES OF COMBINATIONS
• Horizontal combinations
• Vertical combinations
• Conglomerate combinations
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REGULATORY CHALLENGES
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REGULATORY CHALLENGE I
Compatibility with other laws have not been
adequately researched. Will there be any
possibility of regulatory arbitrage?
For example, some Anti-competitive
Agreements are also punishable under the
Holding and Black Market Act, 1948, the
Essential Articles (Price Control and AntiHoarding) Act, 1953, and the Special Powers
Act, 1974.
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REGULATORY CHALLENGE II
Concurrency and conflict with sectoral
regulators might frustrate the purpose of
the competition law.
For example, how would the SEC or the
BERC would envisage its regulatory role
vis-à-vis BCC?
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REGULATORY CHALLENGE III
Absence of Investigating arms may go
against the principle of natural justice.
Bangladesh Competition Commission is a
quasi judiciary body.
‘One cannot be judge of one’s own cause.’
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REGULATORY CHALLENGE IV
Economic factors that can be used to
determine whether an agreement has adverse
effects on competition has not been generally
or specifically identified.
In absence, is there too much discretion
given to the Commission?
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REGULATORY CHALLENGE V
No provision for Leniency Program was
included in the Act.
Market regulation would not benefit from
the service of whistleblowers.
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REGULATORY CHALLENGE VI
Who will run the show?
Does Bangladesh have enough competition
experts?
Is there not also mass ignorance about
competition law and policies? (participatory
regulation vis-à-vis big stick regulation; market
chit-chat; etc.)
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REGULATORY CHALLENGE VII
How independent the Commission will be
in its operation? Will it have enough teeth in
implementing its statutory mandate – both
within and outside Bangladesh? (resisting
powerful lobbies and vested interests)
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ROLE OF MEDIA
DISCLOSURE
through
RESPONSIBLE
REPORTING
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THANK YOU
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